The cost of buying a house

Make no mistake about it - buying property is expensive, however modest your new home. A mortgage is not the only expense.

Before you can take possession of your house, there are extra one-off charges and fees you'll come up against. When working out your budget, you need to be sure you have money ready to pay them.

These include:

deposit

mortgage arrangement fee

valuation fee

legal fees

stamp duty (if you’re a first-time buyer purchasing a property costing more than £300,000, or £125,000 if you’re moving up the property ladder or already own a home)

removal costs

And don't forget once you're in your home, there'll be regular ongoing bills you'll face as a homeowner, on top of your regular mortgage payments, such as:

council tax

energy bills

house insurance

repairs and decorating

furnishings

Here is a guide to how much you're likely to pay out as part of the house-buying process.

How much deposit is required for first time buyers?

Finding a deposit is the biggest hurdle for first time buyers. You'll need to have saved at least 5% of the price you're paying for your new home before you can apply for a mortgage. For a house worth £150,000, that means saving £7,500 just for the minimum deposit.

People who can manage to save only 5% can get extra help from the government. Look at the government's Help to Buy scheme which is designed for people in your situation - whether you're a first time buyer or already in a house and wanting to move up the property ladder.

How much is stamp duty for first time buyers?

In England, Stamp duty, or to give it it's full name, Stamp Duty Land Tax (SDLT) is a tax which is usually payable when you purchase a home costing more than £125,000. In Scotland, it's called the Land and Buildings Transaction Tax (LBTT).

However, under changes announced in the 2017 Budget, first-time buyers no longer have pay stamp duty on property purchases up to £300,000. If you’re buying a home costing up to £500,000, you don’t have to pay stamp duty on the first £300,000, but must pay it at a rate of 5% on anything above that.

If you’re purchasing a property costing over £500,000, you’ll have to pay stamp duty at standard rates.

These rates increase depending on how much your house costs to buy. Between £125,001 and £250,000 it's 2% and it steadily increases to 12% on £1,5 million properties.

Think carefully before securing other debts against your home. Your home or property may be repossessed if you do not keep up repayments on your mortgage.

We're here to offer our customers excellent fee free mortgage advice. Our expert advisers will help you secure the best mortgage deal whether you're a first time buyer, remortgaging your home, buying to let or moving up the property ladder. We'll help you throughout the mortgage process – no hidden costs or surprises, just straightforward, honest, mortgage advice.

Representative example A mortgage of £190,596 payable over 22 years, initially on a fixed rate until 30/04/23 at 1.65% and then on a variable rate of 4.90% for the remaining 17 years would require 63 payments of £860.92 and 201 payments of £1102.66. The total amount payable would be £277,868 made up of the loan amount plus interest (£85,277) and fees (£1,995). The overall cost for comparison is 3.6% APRC representative.

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